why are interest rates higher for people with low credit scores?

Question

I’m asking specifically about people in the U.S. looking to borrow from a lender.

In: 0

Answer 1

Think about it like this more risk more reward…for whoever you are borrowing money from. If you have a low(risky) credit score, you are going to be charged more interest so the bank can make more money on you for taking the risk on someone who doesn’t have a good track record of paying bills on time.